ArcelorMittal Shrugs Off Trade Worries as 2Q Profits Rise
01 Agosto 2018 - 12:37PM
Dow Jones News
By Nathan Allen
ArcelorMittal (MT.AE) on Wednesday dismissed concerns that
global trade tensions would damage its bottom line and said U.S.
tariffs on steel imports were a net positive for the group as it
reported solid second-quarter earnings.
The U.S. is a key market and a major production hub for the
Luxembourg-listed steelmaker, which has long called for stricter
measures to combat an influx of cheap raw materials and is now
benefiting from a 25% duty imposed on all foreign-produced
steel.
Chief Financial Officer Aditya Mittal said protective measures
were justified given the significant overcapacity in global steel
production and "certain nations unfairly supporting domestic
industries," a thinly veiled reference to China.
Mr. Mittal said the company was already benefiting from the
tariffs, which were introduced in the middle of the quarter, and
that he expects the positive impact to continue through the rest of
the year.
He downplayed the effect of global trade tensions on demand from
the auto industry--a vocal opponent of the tariffs--and said that
most of the group's automotive customers buy steel for vehicles
that will be sold domestically.
"There are negative impacts on exports from Canada, Mexico and
Brazil to the U.S. However, our main concern is the massive
overcapacity that exists in the global steel industry," he said
Earnings before interest, taxes, depreciation and amortization,
or Ebitda, in the Nafta region rose more than 56% to $791 million
in the second quarter, which the company attributed to improved
market demand in the U.S.
The steelmaker posted second-quarter net profit of $1.87
billion, up 40% on year, on sales of $20.00 billion. Overall Ebitda
rose 46% on year to $3.07 billion, comfortably outstripping a
company-compiled consensus of $2.85 billion.
ArcelorMittal doesn't provide quantitative earnings guidance but
the company increased its forecasts for steel consumption in China,
the U.S. and the EU, while slightly trimming expectations for
Brazil.
Chief Executive Lakshmi N. Mittal was fairly bullish in a
statement accompanying Wednesday's results, noting structural
improvements in the global steel industry and within ArcelorMittal.
He said deleveraging remained the priority and the group would
continue to pursue its goal of lowering its net debt to $6
billion.
"We believe improvements in underlying industry fundamentals are
sustainable, although there is still more to be done to thoroughly
address the issue of global overcapacity," he said.
Write to Nathan Allen at nathan.allen@dowjones.com
-0-
(END) Dow Jones Newswires
August 01, 2018 06:22 ET (10:22 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Grafico Azioni Arcelor Mittal (NYSE:MT)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Arcelor Mittal (NYSE:MT)
Storico
Da Set 2023 a Set 2024